Focus,project culture and close to customer for new product success says McKinsey Study

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A recent McKinsey study emphasizes that organizations that are successful at NPD (New Product Development) have three characteristics:

  1. Focus: They focus efforts and have clarity in goals and scope of the NPD process upfront-before they start or at least before they get underway,
  2. Nurturing Project Culture: That is when team members matrix report to their immediate bosses and project team leaders and successful organizations are able to manage "turf" politics and celebrate team success,
  3. Close to the customer: Successful organizations develop a close relationship with intended customers and do a better job at concept testing,product testing and market testing. Testing implies that successful organizations are able to re-orient their development efforts depending on what the customers tell them.

Of the three success factors identified, in this study, my feeling is that the first one is the biggest problem in large organizations. A series of top managers sign off on pursuing a new product project without devoting the intense attention (mindfulness ?)  required at the early project selection stage of the stage gate process.The McKinsey study is really talking about the middle of the process, by which time the game is already on and there are simply too many careers at stake.

Why top managers remain silent at the early stages and do not commit intellectually, and wake up only later, is an interesting fact of organizational life.  Let me give an example: let's say an organization wants to get on the "green" bandwagon. Top mangers all say "yes" initially and enthusiastically. But when the project team comes back with the best options – suited for the technology-market mix of the organization several top mangers start raising questions about cost,time,competition and so on. Once top managers develop cold feet, the second point in the McKinsey study kicks in and the project  becomes less important than the line job of the managers involved. In all of this vacillation the customer is forgotten.

"It's okay to wake up- late" seems to be the corporate mantra when it is the NPD process. "At least the questions are raised", everyone feels righteously: never mind the disastrous consequences  for the entire portfolio of NPD projects.

Upfront clear scoping ,top management focus and commitment  may feel uncomfortable as in being pinned down too early in the NPD process. But it is really required if NPD is to succeed.

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